Corporate social responsibility (CSR) in sustainable supply chains
Corporate social responsibility (CSR) has shifted how organisations conduct business and source products. Understanding CSR and using sustainable business practices can help businesses achieve their goals and drive positive change through their global supply chains.
What is corporate social responsibility (CSR)?
CSR is an organisation’s commitment to supporting people, communities, and the environment. Companies with CSR policies in place make themselves accountable to their shareholders and the public for the impact they have on the world. Consequently, CSR is also a strategic approach to doing business in a way that has a lasting positive impact on all stakeholders.
How to measure CSR in your supply chain
There are four different types of corporate social responsibility: environmental, ethical, philanthropic and economic responsibility. A good way to start measuring your CSR is by looking at each type separately.
1. Environmental responsibility
One of the terms most frequently associated with sustainability. Environmental responsibility includes taking steps to minimise waste and pollution while also working towards an environmentally friendly future for all.
Your company can begin by setting standards to reduce the environmental impact of the extraction of raw materials. Secondly, tracking the impact on the environment using data points to gather information about air emissions and water waste helps you identify major risk areas. Lastly, implementing a holistic approach to sustainability can also have cross-departmental benefits and maximise a positive impact on both the environment and people.
2. Ethical responsibility
An aspect of sustainability that is often overlooked. Ethical responsibility is concerned with how an organisation operates treating workers fairly, sourcing products responsibly and treating all stakeholders with respect.
There are five areas organisations should prioritise to prevent social risk when looking at ethical responsibility. These include forced labour, child labour, discrimination, freedom of association and health, safety and hygiene.
3. Philanthropic responsibility
This type of CSR is important when looking at an organisation’s vision and purpose. Companies with strong philanthropic CSR aim to contribute to society at large and make the world a better place. In practice, organisations that prioritise philanthropic responsibility tend to support charitable initiatives or create their own.
To get started, your organisation can begin making contributions to charities that run projects in line with your company’s purpose. Alternatively, your company can encourage employees to volunteer or work in partnerships with smaller not-for-profit organisations to amplify their efforts.
4. Economic responsibility
A business must have the financial resources to support any other initiatives, and support robust communities. Having the CSR areas above at a company’s core drives financial decisions that contribute to profitability, the environment, people and society. An example of economic responsibility is paying decent living wages to employees at company sites and in remote production sites. The financial success of the business is reflected in fair wages and responsible sourcing practices.
Benefits of corporate social responsibility practices
Organisations that embrace CSR can reap several benefits:
- Raise brand awareness and improve reputation by attracting new investors and consumers
- Increase employee engagement by leading a purpose-driven organisation
- Create a competitive advantage by addressing potential CSR risks ahead of time and building a resilient supply chain
- Drive positive impact for workers and communities
- Prevent financial risk by meeting legislation on the environment and workers’ rights across all business operations
How Sedex can help
Sedex offers a variety of tools and expert advice that help organisations like yours get closer to their corporate social responsibility goals. Through our technology and data, Sedex can help you build a more sustainable supply chain to drive positive change and business success.
- The Sedex platform allows you to store, share and report on supply chain information and manage supplier performance on health and safety, due diligence and CSR goals.
- Use a Self-Assessment Questionnaire (SAQ) to gather data about activities and working conditions across your supplier sites.
- Our risk assessment tool helps you identify social and environmental risks across your supply chain and compare inherent risks in relevant countries and sectors.
- Our Consulting team can design a holistic supply chain management plan that focuses on your business priorities and delivers tangible change for you and your key stakeholders.
